Small Firms Loan Guarantee Scheme

NOTE: Changes to the Small Firms Loan Guarantee (SFLG) came into effect from March 2008 mean additional monies are available and cover:

  • Loans up to £250,000 available for companies trading more than 5 years
  • A single guarantee rate of 75% for all new loans;
  • Sector exclusions removed for retailing, catering, coal, hairdressing and beauty parlours, house and estate agents, libraries, museums and cultural activities, motor vehicle repair and servicing, steel and travel agents;
  • The maximum turnover level for non-manufacturing businesses increased from £1.5m to 3m;
  • The premium paid by the borrower set at 2% per year on the outstanding balance for all new loans.

 

Main Terms and Conditions

The SFLG guarantees loans from the banks and other financial institutions for small firms that have viable business proposals but who have tried and failed to get a conventional loan because of lack of security.

Loans are available for periods of between two and ten years on sums from £5,000 to £100,000 (£250,000 if your business has been trading for more than five years). SFLG guarantees 75% of the loan. In return for the guarantee, the borrower pays DTI a premium of 2% a year on the outstanding amount of the loan. The commercial aspects of the loan are matters between the borrower and the lender.

To be eligible, you must be a UK company with an annual turnover of no more than £3m (£5m if you are a manufacturer). Many business activities are eligible but there are a number of exclusions. Loans are available for most business purposes although there are some restrictions.

If you would like to make an application, please contact one of the lenders who are involved in the scheme. They are:

 

SFLG Approved Lenders

Lenders with National Coverage

  • Alliance and Leicester Commercial Bank
  • Bank of Baroda
  • Bank of Scotland
  • Barclays Bank
  • Clydesdale Bank
  • HSBC Bank
  • Lloyds TSB Bank
  • National Westminster Bank
  • The Co-operative Bank
  • The Royal Bank of Scotland
  • Triodos Bank
  • Yorkshire Bank

Geographically Specific Lenders

English Regions

  • Doncaster Business Advice Centre (Donbac) (South Yorkshire)
  • The Enterprise Fund (Greater Manchester and Cheshire)
  • Enterprise Loan Fund (North and West Yorkshire)
  • Foundation East (Eastern)
  • NEL Fund Managers (North East)
  • One London (London)
  • South West Investment Group (South West)
  • UK Steel Enterprise (North of England, Yorkshire, Humberside and the Midlands
  • YFM Group (Yorkshire)

Scotland

  • Airdrie Savings Bank (North Lanarkshire)
  • DSL Business Finance (West Central Scotland)
  • UK Steel Enterprise

Wales

  • UK Steel Enterprise

Northern Ireland

  • Bank of Ireland
  • First Trust Bank
  • Northern Bank
  • Ulster Bank

Factoring and Asset Finance Providers

(SFLG lending is only offered in combination with Factoring or Asset Finance products)

  • Bibby Financial Services
  • Cattles Invoice Finance
  • GAMLTD (General Asset Management)
  • State Securities
  • Venture Finance

Further information about the scheme is available in the SFLG page of the Department for Business Enterprise and Regulatory Reform (BERR) which replaced the DTI website see The BERR website for more information .

Contact your local bank in the first instance.


Reproduced from Small Firms Loan Guarantee Unit at the Small Business Service from UK Government

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